In a world defined by volatility and uncertainty, building disciplined, well-balanced portfolios is key to compounding wealth. At the Mint Money Festival 2026, investment and personal finance experts shared practical insights on managing money and investing wisely.
Saugata Chatterjee, president and chief business officer, Nippon Life Asset Management, in a presentation, explained why asset allocation, not prediction, remains the most reliable strategy for long-term investors.
Living with VUCA
In his presentation, ‘Your Money Playbook: Asset allocation beats stock tips,’ Chatterjee said that volatility, uncertainty, complexity and ambiguity (VUCA) are not new to markets. “They were present ten years ago, twenty years ago, and they will remain part and parcel of our investing lives.”
The world today, he said, is shaped by VUCA at every level—economic, political, geopolitical, and even geo-economic. “Everything we read in newspapers, everything we see on the market screen, eventually comes back to these four forces.”
While this environment makes investing difficult, it does not make it impossible. “Markets have gone through immense ups and downs,” he said, “yet over long periods, compounding has still worked.”
India’s equity markets, despite repeated disruptions, have delivered meaningful long-term returns. “The CAGR may look linear on paper, but the journey has been anything but smooth. Staying invested through volatility is what allows investors to experience that compounding.”
Why asset allocation works
According to Chatterjee, the key lies in asset allocation. “No single asset class wins every year…If you look at the last decade, leadership has constantly shifted—equities, gold, commodities, fixed income—each has had its moment.”
Investors who bet entirely on one category risk being exposed when cycles turn. “Asset allocation simplifies complexity,” he said. “It allows investors to participate in growth while protecting the downside.”
He cautioned against overreliance on diversification within equities alone. “During crises like 2008 or 2020, large-cap, mid-cap and small-cap stocks all corrected together,” he said. “Market-cap diversification does not protect portfolios in extreme situations. Allocation across asset classes does.”
Correlation, he explained, is central to this approach. “When assets have low or negative correlation, portfolios become more resilient,” he said. “That’s how returns stabilise over time. When winners keep changing, the right allocation ensures you’re never completely on the wrong side of the cycle.”
Discipline, Chatterjee stressed, matters more than prediction. “The outcome is never in your control… What is in your control is allocation, time, and rebalancing.”
Investors often fall prey to greed near market peaks and fear during corrections. “That behaviour impacts returns. Asset allocation helps take emotion out of decision-making.”
Multi-asset strategies bring this discipline into practice. “They offer lower volatility, better risk-adjusted returns, and built-in tax-efficient rebalancing,” he said.
